●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Austerity = poverty and leads to civil disorder.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Today, Congress continues its politicized debates about the best way to destroy health care and the American economy. With friends like these, who needs enemies?
Every economist is familiar with this equation:
Federal Deficits – Net Imports = Net Private Saving
It describes how money flows in the economy. Every economist also knows this equation:
GDP = Private Consumption and Investment + Federal Spending – Net Imports
Both equations tell you: When federal deficits are reduced, fewer dollars are created, the saving rate in reduced and the economy suffers. None of this is hypothesis or prediction or guess-work. These equations simply are the actual facts of federal financing. They cannot be debated. They are as certain as Assets = Liabilities + Equity.
Yet the media, the politicians, the old-line economists and the public, at the behest of the upper 1% income group, deny these fundamental truths. Here is yet another example:
Detroit Free Press
Health care overhaul will reduce deficits, Congressional Budget Office finds
By Ricardo Alonso-Zaldivar and Andrew Taylor, July 25, 2012
WASHINGTON — President Barack Obama’s health care overhaul will reduce, rather than increase, the nation’s huge federal deficits during the next decade, Congress’ nonpartisan budget scorekeepers said Tuesday, supporting Obama’s contention in a major election-year dispute with Republicans.
Republicans insist the plan will raise deficits — by trillions, GOP presidential candidate Mitt Romney says. But that’s not true, the Congressional Budget Office said.
The CBO gave no updated estimate for deficit reductions from the law, approved by Congress and signed by Obama in 2010. But it did estimate that Republican legislation to repeal the overhaul — passed recently by the House — would itself increase the deficit by $109 billion from 2013 to 2022.
Translation: “To hell with facts. Deficit reduction is good for America. Fewer dollars help expand he economy. Applying leeches cures anemia. A drought helps crops grow. Trust us.”
Tuesday’s budget projections were the first since the U.S. Supreme Court upheld most of the law last month. The CBO said the law’s mix of spending cuts and tax increases would more than offset new spending to cover uninsured people.
As expected, the budget office said the law will cover fewer uninsured people because the Supreme Court ruled that states won’t have to sign on to a planned expansion of Medicaid for their low-income residents.
Thirty million uninsured people will be covered by 2022, or about 3 million fewer than projected this spring before the court ruling, the report said.
Translation: “To reduce deficit spending by our Monetarily Sovereign government – a government with the unlimited ability to create dollars – about 3 million more people will do without health insurance. Two great results — slower growth for the economy and poorer health care for millions of Americans.”
As a result, taxpayers will save about $84 billion from 2012 to 2022.
Translation: “Don’t tell anyone this secret, but there is no historic relationship between federal taxes and federal spending, so taxpayers will save nothing. Nothing. But, because the public is stupid, we’ll keep feeding them this nonsense. They never will catch on.”
Democrats immediately hailed the findings as vindication for the president. “This confirms what we’ve been saying all along: The Affordable Care Act saves lots of money,” said Senate Majority Leader Harry Reid, D-Nev.
Translation: “To the degree the ACA cuts deficit spending, your savings will be lower. You’ll learn to like being poorer.”
Republicans said they remain committed to repealing it, anyway. When combined with other budget-cutting measures, GOP leaders say that repeal ultimately will reduce deficits. Romney says that if elected, he will begin to dismantle the law his first day in office.
Translation: “Not only do we want to cut the deficit, which will reduce GDP growth, but we want to cut health care coverage for millions of people. Now, if only we could cut Social Security benefits, we’d have a perfect trifecta to increase the income gap between the upper 1% income group and the lower 99%.”
Bottom line: The federal government can and should provide fully-paid Medicare to every man, woman and child in America. It would improve health care for you, for your friends, family and neighbors, stimulate economic growth, and reduce unemployment.
But, the cattle, dumb, drooling and defeated, obediently slump into the slaughterhouse, with never a “moo” in protest.
Rodger Malcolm Mitchell
Sadly, I must award three dunce caps to the American people, who have allowed the media, the politicians and the old-line economists to get away with saying that taking dollars out of the economy benefits the economy. Think, people, think.
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports